A 17-year, $1,000 par value zero-coupon rate bond is to be issued to yield 7 percent. Use Appendix B for an approximate answer but
calculate your final answer using the formula and financial calculator methods.
a. What should be the initial price of the bond? (Assume annual compounding. Do not round intermediate calculations and round
your answer to 2 decimal places.)
Bond price
b. If immediately upon issue, interest rates dropped to 6 percent, what would be the value of the zero-coupon rate bond? (Aasume
annual compounding. Do not round intermediate calculations and round your answer to 2 decimal places.)
Bond price
c. If immediately upon issue, interest rates increased to 9 percent, what would be the value of the zero-coupon rate bond? (Resume
annual compounding. Do not round intermediate calculations and round your answer to 2 decimal places.)
Bond prica